A distinguished seat of learning, teaching and research

Over the last year, the economics department has expanded in terms of size and scope. Much of the exciting work that is being done on the research and teaching side is because of the dynamic young faculty in the Department of Economics. Their activities have ranged from constantly updating their course syllabi, to finding new ways of challenging their students, to engaging in cutting edge research with some of the best research institutions in the world, the faculty of economics has taken the lead. This work is now being recognized locally and internationally with a significant number of our students getting foreign scholarships for further academic work, a growing number of students being recruited by international development institutions and the private sector and a growing number of international publications.

The research team developed a cost saving technology in 2012 which it has given to a number of soccer ball manufacturers in Pakistan in order to determine the factors affecting technology adoption in firms and technology spillovers between firms. The research team has also looked at how misaligned incentives between firms and employees can affect technology adoption.

Presently the research team is looking at how subsidizing high quality inputs impact quality upgradation in the soccer ball sector. In order to the this, the research team is giving up to up to Rs 600,000 in rexine subsidizes to a randomly selected group of football manufacturers.

The project has been funded by IGC and PEDL and collaborators include Eric Verhoogen (Columbia University), Amit Khandelwal (Columbia University) and David Atkin (MIT).

The research team is working to benchmark the productivity of garment factories in Pakistan.

The pilot phase of the project will be used to understand bottlenecks to increasing productivity with the aim to develop productivity-enhancing interventions for the sector, to be evaluated through the method of a Randomized Controlled Trial (RCT).

The project has been funded by the IGC and collaborators include with Christopher Woodruff (University of Warwick) and Rocco MacChiavello (University of Warwick).

The aim of this initiative is to map the production process and the technologies used in the soccer ball and ready made garments sector. Then using this map, compare the technologies in these sectors with the forefront of international technologies to see how far behind firms in Pakistan are. Finally, the research team will see what incentives can be given to Pakistani firms to adopt new technologies (like financial incentives, supplying information about these technologies, providing assistance of adoption of these new technologies, etc).

Collaborators include Rajah Rasiah (University of Malaya).

Incentivizing Attendance in Production Teams Dr. Theresa Chaudhry and ZuniaTirmazee

The research team tested whether short-term financial incentives can be used to decrease worker absenteeism in one of Gujrat’s leading fan factories. In 2012 -2013, they piloted attendance incentive schemes on a sample of production teams. Comparing the attendance records of the teams offered the group-based incentive to a control group, the research team has found that the group-based incentive bonus increased the number of days that an announced attendance target was met.

The project was funded by the IGC and collaborators included Christopher Woodruff (University of Warwick) and Muhammad Haseeb (University of Warwick).

The researchers examined the causes of consanguineous marriage, and attempted to measure the effects of consanguineous marriage, both negative and positive. In this project, nine (out of Punjab’s 35 districts) were randomly selected, comprising 70 sampling clusters. Interviews of just over 1000 households were conducted in October 2009. A total of 4643 pregnancies were reported by 391 first cousin (37.6% of the marriages) and 622 non consanguineous couples interviewed in the study.

The government of Punjab, starting in 2004, offered a conditional cash transfer (CCT) of Rs 200 per month, to girls in class 6 to 8 with minimum 80 percent attendance, in order to increase the educational attainment of girls in districts with less than 40 percent literacy. Using data collected a survey of rural households in Punjab, the researchers analyzed the impacts of this CCT on enrollment and marriage outcomes by comparing eligible girls to their non-eligible elder sisters and younger siblings in both stipend and non-stipend districts.

This project was supported by the British Academy and Lahore School of Economics and collaborators include MushfiqMobarak (Yale University).

Textiles is the major manufacturing sector of Pakistan contributing one-fourth of industrial value added, employing 40 percent of industrial labor force, and on average 60 percent share of national exports.

In this project, they plan to study innovation activities of firms in the textiles sector of Pakistan during 2011- 2013. The survey will be completed by the end of 2015 across a sample of 500 textile firms in Punjab and Sindh and will measure both the technological (product and process) and the non-technological (organizational and marketing) aspects of innovation.

The project has been developed under the firm capabilities program of the IGC.

The research team is exploring the relationship between government size and economic growth in an endogenous growth model with human capital and unproductive social capital. The researchers show that with endogenous discounting, growth outcome is history dependent and is function of initial endowment of human capital. With low endowment, government intervention of any size is growth depressing. With high endowment, government intervention is not associated with any depressing effect. For intermediate levels, there are multiple equilibria. Furthermore, countries with identical endowment and government size can be in different equilibrium, and can have different growth rates within same equilibrium if they differ in institutional quality.

Two Sides of the Same Rupee? Comparing Demand for Microcredit and Microsaving in a Framed Field Experiment in Rural Pakistan Farah Said and Uzma Afzal

The study is a Randomized Control Trial designed to compare the effectiveness of micro-savings and micro-loans as means for households to manage risk and liquidity.

This research is funded by the IGC and is collaboration between the Lahore School of Economics, the University of Oxford and the National Rural Support Programme (NRSP), Pakistan. Collaborators are Marcel Faffchamps (Stanford University), Giovanna d’Adda (University of Birmingham) and Simon Quinn (Oxford University).

The study is an impact evaluation of a unique micro-loan product with a training component that is provided only to female borrowers to start-up their microenterprise.

Baseline activities were funded by the Kashf Foundation and were concluded in August 2014. Endline activities are being funded by the IGC.

This research is collaboration between researchers at the Lahore School of Economics, University of Kent, and the Kashf Foundation, Pakistan.

Pressures from peers and spouses and self-control problems as constraints to microenterprise growth: Experimental evidence from Pakistan Farah Said and Uzma Afzal

This study is assessing the role of self-control problems and peer pressures on take-up and use of a financial product by female microentrepreneurs in Pakistan, by combining laboratory and field experiments.

This project is funded by the IGC and collaborators include Marcel Faffchamps (Stanford University) and Giovanna d’Adda (University of Birmingham).

Learning about Disaster: Evidence from a field experiment in Pakistan Farah Said and Uzma Afzal

This research project is using behavioral field experiments to study the effect of rare events on individual decision-making.

This research is being jointly funded by the British Academy International Partnerships grant and the Lahore School of Economics and is a collaboration between the Lahore School of Economics and the University of Oxford.

Collaborators include Ginger Turner (University of Pennsylvania).

Incentivizing Development: A Field Experiment on Third Tier Organizations in Pakistan Hamna Ahmed and Asha Gul

This study is a Randomized Control Trial (RCT) being funded by the Pakistan Poverty Alleviation Fund (PPAF). The study focuses on incentivizing development across 800 Local Support Organizations (LSOs) spread across Pakistan by testing the impact of two sustainable measures the donor can take to engage with these community-based organizations: (i) self-reporting and (ii) non-financial incentives.

Dr. Theresa Chaudhry presented a study (with Mahvish Farhan) on the management practices and organizational structures of electric fan and ready-made garment producers in Punjab at the Annual Conference on the Management of the Pakistan Economy in March 2015. This paper was subsequently published with the conference proceedings in the special edition of the Lahore Journal of Economics. She prepared and taught two new courses on industrial organization for the PhD Economics program at the Lahore School. She also completed supervision of Anam Masood’s MPhil thesis, on the educational and marriage impacts of the female secondary schooling stipend program in Punjab.

Dr. Azam Chaudhry, Ms. Shamyla and Tariq Raza

A research team at the Lahore School of Economics (Dr. Azam Chaudhry, Shamyla Chaudry and Tariq Raza) has been conducting internationally recognized research on technology in the football sector in Sialkot for the last 5 years with the support of the Government of Punjab and the Sialkot Chamber of Commerce. This has been jointly conducted by researchers at the Lahore School of Economics, Columbia University and the Massachusetts Institute of Technology (MIT). The researchers have recently launched a novel rexine subsidy project on 12th August 2015 in order to help Sialkot football manufacturers overcome the high cost of imported rexine. In this project more than 70 firms from the Sialkot football sector were invited to an event in which 30 firms will be randomly selected to receive high-valued vouchers for the purchase of high-quality foreign Rexine at a large discount. Each selected firm will be eligible to get the first voucher and will receive up to PKR 650,000 in the form of four vouchers. Provision of subsequent vouchers will be subject to successfully clearing all audits.

Also the research team at the Lahore School of Economics (Dr. Azam Chaudhry, Shamyla Chaudry and Tariq Raza) has completed data collection and is in the process of writing a research paper for the World Bank on the History of the Sialkot Football Sector.

Dr. Mohammad Aslam

Academics:

In academics Dr. Aslam completed a decade of teaching. During this period he had mostly specialized in teaching of subjects such as Macro 1, Macro 2 and Pakistan Economy to graduate and undergraduate classes. In one semester, he was also asked to teach Development Economics to an undergraduate class. In this period two of Dr. Aslam’s books on Pakistan Economy namely Pakistan Economy in Retrospect 1947 - 2010 and Pakistan Economy: Objective Test Bank got published by Ferozsons Lahore.In 2014-2015, Dr. Aslam was asked to teach two new papers namely Economic and Financial Analysis of Projects and Pakistan Studies.

Research:

In early 2014, Dr. Aslam had started a mammoth research project on Evolution of Economic Policy and Economists in Pakistan. The project was divided into 3 parts. In part 1, a critical study of the evolution of economic policy during different periods and the role played by economists and bureaucrats-turned-economists was to be conducted. The second part is going to comprise an evaluation of the profession of economics from the inception of Pakistan to the present times and role played by different economic institutions, associations, postgraduate departments of universities, agencies and economic journals. The third part is supposed to present brief profiles of all major economists working inside as well as outside the country.

The study is expected to be finalized in 2016.

Dr. WaqarWadho

During the period, Dr. Wadho published a paper titled ‘Corruption, Tax Evasion and the Role of Wage Incentives with Endogenous Monitoring Technology," in ECONOMIC INQUIRY.

Dr. Wadho also presented a paper at the Public Economic Theory conference PET16, held in Luxembourg, Luxembourg and at the XXIV Meeting of the Economics of Education, held in Madrid, Spain.

Syed Toqueer Akhter

Syed Toqueer, Visiting Senior Teaching and Research Fellow has been engaged in Curriculum development, teaching & Research supervision with Lahore School of Economics, since 2001. His teaching interests include Quantitative aspects of Economics & Research methodology. So far, he has supervised some 328 theses & over 100 papers in diverse functional areas of Economics as well as Management Sciences.

IV. Conferences and Seminars Hosted by the Department of Economics

Microfinance and Enterprise Development – Research Prospects and Challenges

The Center for Research in Economics and Business and University of Oxford jointly hosted a conference on the Microfinance and Enterprise Development – Research Prospects and Challenges on April 16, 2015. The conference was part of the ESRC-DFID project on ‘Microcredit and microsaving for small enterprises in Pakistan’. The conference brought together speakers from microfinance institutions, donors, academics and practitioners from Pakistan and outside of Pakistan. The conference highlighted the current and future research on microfinance with the purpose to start a conversation on the roles research can play in the future to help the sector achieve its goals of poverty alleviation, financial inclusion and sustainable enterprise growth. The conference was attended by Dr. Rashid Bajwa (CEO, National Rural Support Programme), Dr. Amjad Saqib (Founder and Exectuive Director, Akhuwat), QaziAzmat Isa, Chief Executive Officer (Pakistan Poverty Alleviation Fund), Syed Mohsin Ahmed (CEO, Pakistan Microfinance Network), Dr. Simon Quinn (Associate Professor and Deputy Director, Centre for the Study of African Economies, University of Oxford), Matthew Titus (Former Founder Executive Director, Sa-Dhan), Sanjay Sinha (Managing Director, Micro-Credit Ratings International Limited (M-Cril), Ghazala Mansuri (Lead Economist, World Bank) .

Lahore School of Economics and World Bank Conference on Poverty

The Lahore School of Economics and the World Bank jointly organized a brainstorming session on poverty measurement and policy at the Main Campus on 17 April 2015. The session was intended to get an open discussion going on issues in the measurement of poverty, and its implications for policy, and to facilitate the formation of an independent expert group to guide the process of arriving at a credible methodology and process for measuring and monitoring poverty.

Opening comments were made by Dr. Shahid Amjad Chaudhry, Rector, Lahore School of Economics; Mr. Asif Bajwa, Chief Statistician, Pakistan Bureau of Statistics; and Dr. Naeemuz Zafar, Ministry of Planning Development and Reform. Following that, Dr. Ghazala Mansuri, Lead Research Economist at The World Bank gave a presentation on “Poverty debate in Pakistan: What accounts for the disconnect between the data and perceptions?” This raised issues for discussion on lack of confidence in the quality of official surveys such as the Pakistan Social and Living Standards Measurement Survey (PSLM) and the Household Income and Expenditure Survey (HIES), lack of confidence in the official consumer price index as a measure of inflation faced by the poor, especially in rural areas, concerns about the basket of goods and the calorie threshold used for estimating the poverty line, and the method used for tracking trends.

In response to Dr. Mansuri’s presentation, Dr. Naved Hamid, Professor and Director, Center for Research in Economics and Business (CREB), Lahore School of Economics, moderated the discussion that welcomed expert opinion and recommendations from distinguished poverty experts, academics and policy makers.

The debate aimed at aiding the process of initiating a joint effort by the Planning Commission, the Pakistan Bureau of Statistics and the World Bank, in establishing an independent expert group of highly credible academics and researchers.

Lahore School of Economics and Oxford University Conference on Microfinance and Enterprise Development

The Lahore School of Economics in partnership with Oxford University hosted a conference on Microfinance and Enterprise Development. The objective of the conference was to bring together speakers from microfinance institutions, donors, academics and practitioners from Pakistan and outside of Pakistan. During this one-day event there was a detailed discussion on current and future research on microfinance with the purpose to start a conversation on the roles research can play in the future to help the sector achieve its goals of poverty alleviation, financial inclusion and sustainable enterprise growth. The conference was conducted as part of an on-going project on a comparison of Demand for Microcredit and Microsaving in a Framed Field Experiment in Rural Pakistan, which is funded by Economic and Social Research Council-Department of International Development (ESRC-DFID).

The conference started with welcoming remarks by Dr. Shahid Amjad Chaudhry (Rector, Lahore School of Economics). The keynote speech was delivered by Dr. Rashid Bajwa who showed that the microfinance sector in Pakistan has witnessed a tremendous growth – from 164 thousand borrowers in 2003 to 3.3 million borrowers in 2015. At present, there are 50 microfinance providers operating in the country. Moreover, the sector continues to attract foreign investment.

The first session of the conference focused on the current state and future directions of the microfinance sector. The chairperson for the session was Dr. Rashid Bajwa (Chief Executive Officer, NRSP). The session was conducted jointly by, Dr. Amjad Saqib (Founder and Executive Director, Akhuwat), Syed Mohsin Ahmed (Chief Executive Officer, Microfinance Network), Kamran Azim (Chief Operating Officer, Kashf Foundation), and ShahidMaqsood (Chief Operating Officer, FINCA Microfinance Bank Limited).Dr.AmjadSaqib gave a brief overview of the unique model of microfinance that Akhuwat is following, based on interest free loans. Syed Mohsin Ahmed discussed an impact assessment study, which PMN is planning to conduct in the near future in order to investigate the impact of microfinance loans on employment and job creation. Kamran Azimgave an overview of the current approach that is being followed by Kashf Foundation. The strategy focuses on (i) credit programs with existing businesses as well as start-ups (ii) A large scale financial literacy program (iii) a health insurance program as well as support for schools in low income areas and (iv) microsaving products.

The second session of the day served to disseminate and invite feedback on the current research being conducted by Lahore School on microfinance. The chairperson for the session was Kamran Azim (Chief Operating Officer, Kashf Foundation).

Simon Quinn (Associate Professor and Deputy Director, Centre for the Study of African Economies, University of Oxford)presented the first paper in the session (written jointly with Uzma Afzal, Giovanna d’Adda, Marcel Fafchamps, and Farah Said), while the discussant for the paper was TahirWaqar (Senior Program Manager, National Rural Support Programme (NRSP)).

The paper is based on a recent pilot study conducted in Sargodha, which directly tested between the demand for microcredit and demand for micro-savings using a framed field experiment amongst women borrowers of NRSP participating in group lending arrangements in rural parts of Sargodha. The experiment involved randomly offering credit productsand savings products to the same subject pool. The study concluded that a high demand exists for both credit products and for savings products implying that the distinction betweenmicro-lending and micro-saving may be largely illusory; participants value a mechanism for regular depositsand lump-sum payments, whether that is structured in the credit or the debt domain.Fieldwork for the study is currently underway. A scaled up version of the study will be carried out later this year.

The session ended with a presentation by Uzma Afzal (Assistant Professor and Research Fellow, Centre for Research in Economics and Business, Lahore School of Economics) with Ghazala Mansuri (Lead Economist, World Bank) as the discussant.It was a preliminary presentation discussing the methodology for a project (to be conducted jointly with Giovanna d’Adda, Marcel Fafchamps, Simon Quinn and Farah Said) which aims to use behavioural games to understand how self-control problems and peer pressure affect take-up and outcomes of a financial product and secondly how access to saving and/or credit affect self-control problems and ability to resist peer pressures?

The third session of the day also focused on recent research that has been conducted in the microfinance sector in Pakistan. The first paper in this session was presented by Ghazala Mansuri (Lead Economist, World Bank), which was written jointly with Xavier Giné. The discussant for this paper was Ayesha Afzal (Assistant Professor, Lahore School of Economics). The main objective of the paper was to identify the relative importance of human and physical capital for entrepreneurship. Microfinance clients were offered business training and a loan lottery of up to seven times the average loan size. The paper concluded that business training increased business knowledge, reduced business failure, improved business practices and increased household expenditures by $46 per year. It also improved financial and laboral location decisions. Access to larger loans,in contrast, had little effect. Despite the positive impact on clients, business training was not cost-effective for the microfinance institution, explaining why few institutions offer training voluntarily.

Farah Said (Assistant Professor and Research Fellow, Centre for Research in Economics and Business, Lahore School of Economics) presented the second paper in the session (written jointly with Azam Chaudhry, Naved Hamid and Mahreen Mahmud). The discussant for this paper was Ommara Raza (Senion Manager Research, Kashf Foundation). The paper is based on a baseline survey for a Randomized Control Trial to evaluate the socio-economic and welfare impacts of micro-loans to female micro-entrepreneurs. The project is being conducted in collaboration with Kashf and the fieldwork is currently underway.

The final paper in this session was presented by Mahreen Mahmud (Phd Candidate, University of Kent). The discussant for the paper was Sajjad Akhtar (Member, Pakistan Microfinance Network Research Committee). The paper explored a unique microfinance model based on zero interest loans and voluntary contributions instead of one with a fixed interest charge. This model provides more scope for signalling to the borrowers especially in the case of joint liability contracts. Thus, the author investigated if patterns of giving and repeat borrowing are consistent with what would be expected of signalling behaviour.

The conference ended with a detailed panel discussion on the role of research in helping the microfinance sector achieve its objectives and in shaping its future. The chairperson for this session was QaziAzmat Isa (Chief Executive Officer, Pakistan Poverty Alleviation Fund). The panel session was conducted jointly by Akbar Zaidi (Member Board of Directors, Pakistan Microfinance Network), Waqas-ul-Hasan (Private and Financial Sector Development Adviser, Departament for International Development), AbanulHaq (Head Education Innovation Fund, Ilm Ideas), Mathew Titus (Former Founder Executive Director, Sa-Dhan) and Sanjay Sinha (Managing Director, Micro-Credit Ratings International Limited).

IMF Chief Visits Lahore School to Meet Students

On March 6th, 2015, the Lahore School of Economics hosted the IMF Director for Middle East and Central Asia, Mr. Masood Ahmed, who held a roundtable discussion with a group of students from local universities to discuss the IMF and its program in Pakistan. Students from the Lahore School of Economics, the Lahore College for Women University, the Lahore University of Management Sciences, Beaconhouse National University and Forman Christian College University attended the roundtable discussion to share their views with the visiting IMF team. The roundtable was chaired by Mr. Ahmed, Dr. Shahid Amjad Chaudhry, Rector of the Lahore School of Economics and Dr. Azam Chaudhry, Dean Faculty of Economics, Lahore School of Economics.

Dr. Shahid Amjad Chaudhry, Rector of the Lahore School of Economics welcomed Mr. Masood Ahmed, the IMF Director of the Middle East and Central Asia region, Mr. Herald Finger, the IMF Pakistan Mission Chief and Mr. TokhirMirzoev, the IMF Resident Representative for Pakistan. Dr. Chaudhry discussed the macroeconomic situation prevailing in Pakistan at the time when Pakistan entered the IMF program as well as the prevailing macroeconomic challenges faced by the country.

Mr. Masood Ahmed began by discussing the history and role of the IMF in the global economy and explained how the IMF assists countries in terms of technical assistance, macroeconomic advice and lending in case of macroeconomic crises. Mr. Ahmed then explained how the balance of payments problem that Pakistan faced in 2013 led to a significant reduction in its foreign exchange reserves which in turn led the Pakistani government to ask the IMF for assistance. Finally, Mr. Ahmed explained how the IMF was different from other international agencies like the World Bank and the Asian Development Bank because these other institutions focus on development assistance with lending for specific projects and initiatives while the IMF focuses on macroeconomic stabilization with a specific emphasis on fiscal deficits and exchange rate adjustments.

This introduction was followed by a series of questions regarding the role of the IMF in Pakistan. Many students asked Mr. Ahmed why the IMF insisted on significant reductions in expenditures which mostly led to significant reductions in development expenditures that could impact long term growth. At the same time other students asked why the IMF insisted on increasing tax revenues which in many cases led the government to adopt taxes that many considered regressive. Mr. Ahmed explained that one of the major issues facing developing countries like Pakistan is that countries spend far more money than they collect and this leads to macroeconomic problems. He then went on to explain that the IMF has recognized that governments tend to slash development expenditures immediately which means that there are significant reductions in spending for critical sectors like health and education. For this reason, the IMF now includes in its program a requirement that governments maintain a certain level of spending in critical social sectors. Mr. Ahmed also explained that the IMF does not get involved in determining specific taxes but is more concerned with the overall objective of macroeconomic stabilization.

Another set of questions by the students focused on why Pakistan constantly kept reentering IMF programs but failed to complete any programs. Mr. Ahmed explained that these two issues were closely interlinked: Pakistan has some basic structural problems which become severe every few years and requires IMF assistance, but after a year or two of the IMF program the Pakistan government feels that the crisis has passed so they do not continue to take measures to address these issues. This has led to a cycle in which the Pakistan government asks for IMF assistance, stabilizes the economy, and then stops following IMF advice for long term reform which then leads to the same crisis reoccurring after a few years.

Finally, the students asked Mr. Ahmed’s views on the energy crisis facing Pakistan as well as the impact of falling oil prices on oil exporting countries (like those in the Gulf, or Nigeria an Venezuela) and oil importing countries like Pakistan. Mr. Ahmed says that the energy crisis in Pakistan is a significant issue facing policymakers as well those interested in macroeconomic stabilization and long-term growth and that the significant fall in oil prices has been handled differently by developing countries. Some countries like Pakistan have decided to pass on a portion of the fall in oil prices to the final purchasers, while others like India have kept the final prices of fuel the same by increasing the taxes on these products in order to shore by their domestic revenues. Mr. Ahmed also discussed how the significant decline in oil prices has had a major impact on the economies that are heavily reliant on oil and he also discussed the balance of payments impact of falling oil prices on countries like Pakistan.

Mr. Ahmed then ended the roundtable discussion by thanking Dr. Shahid Amjad Chaudhry, Dr. Azam Chaudhry, the student participants from various universities and the Lahore School of Economics for hosting this event. He told the audience that it was important for economists and macroeconomic policy makers to interact with students to understand the issues that were important to them and to society and to discuss long term economic strategies in order to develop inclusive policies that are understood and lead to long term growth.

Oxford Lecture on Conducting Research in Economics

Dr. Simon Quinn, Associate Professor of Economics at the University of Oxford and Deputy Director of the Centre for the Study of African Economies at the University of Oxford, gave a lecture to the Lahore School Department of Economics on conducting research in economics and publishing research papers.

Dr. Quinn is collaborating on research with the Center for Research in Economics and Business (CREB) at the Lahore School of Economics and his research interests are in development economics, focusing on the role of firms.

Lahore School of Economics Hosts Former Greek Finance Minister

“In Greece the GDP fell by 25% in five years, unemployment reached 28% while public debt as percent of GDP rose to 175% reflecting mainly the collapse of output,” according to Dr. YannosPapantoniou in a lecture delivered at the Lahore School of Economics May 5, 2015.

Dr. Papantiniou, Former Economy and Finance Minister of Greece (1994-2001) and President of the Centre for Progressive Policy Research, in his lecture “Economic Crisis in Greece and the Future of the Euro” was of the view that if talks between the lenders (ECB, IMF, and the EU) and Greece stall, Greece’s economy would sink further into recession, and social tensions would rise as living standards would register a further sharp decline.

He emphasized that Greece’s economic problems did not arise during the process of acceding to the euro area, but began when large current imbalances emerged among member countries soon after the currency union’s creation in 2000. Massive current account deficits in the weaker economies led to the accumulation of public and private debt while the northern Europeans were running surpluses.The policies that the eurozone has initiated to tackle the debt crisis have been inadequate and even self-defeating.

“Greece’s never ending economic crisis revealed critical flaws and weaknesses in the eurozone’s constitution,” according to Dr. Papantiniou, who is currently a visiting Professor at the Lahore School of Economics.He was of the view that in a currency union, individual economies cannot alter their exchange rates to account for changes in relative competitiveness. The resulting price stickiness tends to delay macroeconomic stabilization and structural adjustment, leading to rising debt and unemployment in weaker economies. Without free labour mobility, fiscal transfers are the euro area’s only option to ease debt repayment and, by stimulating economic activity, boost employment.

Moving to a fiscal union, along the lines of the U.S. Federal model, will not be easy according to Dr. Papantoniou, as it requires a resource that is in short supply in Europe today: mutual trust, particularly between the north and the south. Binding the union closer together could prove critical to building such trust. One strategy that combines rationality with the gradualism needed to overcome political resistance would be to increase the union’s central budget so that it can ultimately play a macroeconomic role, promoting stability and reinforcing cohesion in the euro area.He stressed that“it is a tough sell, but also a vital one.”

He noted that Asia is the continent of the future, with China and India as giant economic players. The more integration within Asia, the strong it will become and Pakistan would only gain by strengthening ties with its neighbors China and India. He cautioned against moving too fast and instead take it step by step in order to minimize risks.

Talk on The West and the Rest in the World Economy by Dr. Deepak Nayyar

As part of the Distinguished Economist Seminar Series, the Lahore School Economics Society (LSES) organized a seminar on February 26, 2015. The guest speaker was a renowned Indian economist Dr. Deepak Nayyar who talked about “The West and the Rest in the World Economy: The Next Transformation” based on his recent book ‘Catch Up: Developing Countries in the World Economy’. The seminar was attended by distinguished professors and economists including Dr. Shahid Amjad Chaudhry (Rector, Lahore School of Economics), Dr. Rashid Amjad (Director the Graduate Institute of Development Studies (GIDS)), Dr. Azam Chaudhry (Dean, Department of Economics, Lahore School of Economics), Dr. Naved Hamid (Director, Center for Research in Economics and Business) and Dr. Irfan-ul-Haque (Special Advisor for Financing for Development, South Centre, Geneva), faculty members of Lahore School and a large number of both graduate and undergraduate students of Lahore School.

Dr. Deepak in his talk provided a comprehensive overview of the evolution of developing countries in the world economy, situated in a long term historical perspective, from the onset of the second millennium but with a focus on the second half of the twentieth century and the first decade of the twenty-first century. He highlighted the overwhelming significance of what are now developing countries in the world until 200 years ago to trace their decline and fall from 1820 to 1950. Dr. Deepak emphasized that there is no single formula for growth and different sets of policies seem to have worked well in different settings, but economies relying on market as driving force have minimized market failures and those relying on government as central have minimized government failures. Also, growth has often not been transformed into meaningful development that improves the wellbeing of people. However, he optimistically asserted that the beginnings of a shift in the balance of power in the world economy are discernible and developing countries can sustain this rise only if they can transform themselves into inclusive societies where economic growth, human development and social progress move in tandem.

The seminar was followed by a discussion session with the faculty and students which was moderated by Dr. Shahid Chaudhry himself. The seminar concluded with a brief speech by Dr. Shahid who welcomed the visit of such highly distinguished economists like Dr. Deepak Nayyar from India stating that such academic visits could provide opportunities for collaboration between India and Pakistan both in the academic and research front.

Lecture on Reigniting Economic Growth in Pakistan by Dr. Rashid Amjad

As part of the Distinguished Economist Seminar Series, the Lahore School Economics Society (LSES) organized its first seminar on February 18, 2015. The guest speaker was a renowned Pakistani economist Dr. Rashid Amjad who talked about “Re-igniting economic growth in Pakistan”. The seminar was chaired by the patron LSES, Dr. WaqarWadho and was attended by distinguished professors and economists including Dr. Shahid Amjad Chaudhry (Rector, Lahore School of Economics), Dr. Azam Chaudhry(Dean, Department of Economics, Lahore School of Economics), Dr. Sohail Zafar, (Dean, Department of Business Administration), Dr. Naved Hamid (Director, Center for Research in Economics and Business) and Dr. Irfan-ul-Haque (Special Advisor for Financing for Development, South Centre, Geneva), Dr. ShakilFaruqi (Professor, Lahore School of Economics), faculty members of Lahore School and a large number of both graduate and undergraduate students of Lahore School.

Given his expertise on the management of Pakistan economy, Dr Rashid focused this seminar on the issue of economic growth in Pakistan. He started off the analysis by providing a very comprehensive overview of the performance of Pakistan economy in the past decades and highlighted the need to focus on the ‘binding constraints’ that hamper growth. He argued that foreign exchange has been a binding constraint for decades. In recent years, due to inadequate focus on energy, today, the most important constraint that the Pakistan economy faces is the energy shortage and therefore, the government should target this as its highest priority. He suggested that the falling oil prices present a window of opportunity which should be exploited to alleviate the existing constraints. In his concluding remarks, Dr. Rashid advised the young economics students to focus on the underlying theory and fundamentals of economic policy-making along with thinking out-of-the-box so that more creative yet pragmatic solutions to the existing economic problems can be suggested.

Orientation of Lahore School Economics Society

The Lahore School Economics Society (LSES) organized its first orientation on November 17, 2014. Dr.Shahid Amjad Chaudhry, the Rector Lahore School was the guest of honour. A large number of students and faculty (including Dr. Azam Chaudhry, Dr. Theresa Chaudhry, Shamyla Chaudry and members of executive council) attended.

First, Dr. WaqarWadho the Patron of Society thanked Dr. Shahid Amjad for providing this platform and addressed students that LSES aims to provide them with a platform to connect with fellow Economics students within and outside LSE (within and outside Pakistan), to connect with eminent economists (Pakistani and foreigners) and to connect with professionals (including LSE alumni) to form a vibrant economics community that is more informed, engaged and aware of the scope of opportunities and relevance of economics.

The President and Vice President of the LSES Council briefed attendees about the proposed activities that include lectures/guest speaker sessions and seminars with economists and other professionals; competitions including an international essay competition, yearly national budget sessions, and quiz competitions; regular sessions with the Dean/Rector; and creation of a central information system that would actively gather information on different opportunities available for students pursuing Economics.

This was followed by an address by Dr. Theresa Chaudhry, Senior Faculty Member, who enlightened students about the ongoing research collaborations between the Lahore School of Economics and other universities including Oxford, Columbia, Yale and Warwick, and international institutions such as the International Growth Center. These collaborations have led to research on microfinance, distribution of public services, and manufacturing including the football, fans, and garment sectors.

Then, Dr. Azam Chaudhry, Dean Faculty of Economics addressed the gathering and greatly applauded the efforts of the Society. He spoke about different collaborations and exchange programs with international universities (Lahore School-Oxford doctoral exchange program and Memorandums of understanding which cover areas like student and faculty exchange with Bahçeşehir University in Turkey, University of Colombo in Sri Lanka and with Macquarie University in Australia. Dr. Azam also discussed a variety of different course combinations offered at the School that makes it a unique institution, as well as the job market and scholarships prospects for economics students.

Dr. Shahid Amjad Chaudhry, Rector, Lahore School of Economics congratulated the Council and the Society members for this initiative. Dr. Shahid Amjad elaborated on both the teaching and research sides of the Lahore School that make it what it is. He told students that the course combinations and teaching facilities at Lahore School are of high standards, thisis evident from the recent acknowledgement by the National Business and Accreditation Council that gave Lahore School the highest ratings in Pakistan. He informed students that the Lahore School produces top quality research that is published in international journals, and both the government and private sectors repeatedly seek policy guidance from Lahore School researchers. What makes it even more unique is that Lahore School researchers do not charge for these research studies and they are done purely for academic purposes.

Presentations by the Faculty of the Lahore School of Economics

The Economics Department hosted both visiting faculty and its own faculty to discuss some of the cutting edge research that they are conducting. These presentations included:

1. Dr. Simon Quinn, Associate Professor of Economics at the University of Oxford and Deputy Director of the Centre for the Study of African Economies at the University of Oxford, gave a lecture to the department of economics on conducting research in economics and publishing research papers. Dr. Quinn is collaborating on research with the Center for Research in Economics and Business (CREB) at the Lahore School of Economics and his research interests are in development economics, focusing on the role of firms.

14. HafsaTanveer presented on "Unique and Multiple Equilibria in a Macroeconomic Model with Environment: Stability Analysis and Transitional Dynamics."

15. Anam Masood presented on "Impact of Female Secondary School Stipend Program on Enrollment, Marriage and Fertility Outcomes in Punjab."

16. Amber Masood presented on "Female Empowerment and the Uptake of Maternity Care Services in Pakistan."

V. Conferences Attended by the Department of Economics

Lahore School Faculty Attend CSAE Conference 2015

Researchers from CREB presented papers at the Centre for the Study of African Economies (CSAE), Annual conference held on March 22nd - 24th 2015. The Centre for the Study of African Economies (CSAE) is an economic research centre within the Department of Economics at the Oxford University. CSAE carries out economic research with a particular aim to improve economic and social conditions in the poorest societies. The Annual conference brings together researcher from all across the globe carrying out cutting edge research with a focus on development. Uzma Afzal and Farah Said presented their papers at the conference.

Lahore School Faculty Members attend ADB 3ie Conference

The research fellows at the Center for Research in Economics and Business (CREB), Lahore School of Economics, presented their on-going projects at the ADB 3ie Conference on Making Impact Evaluation Matter held on September 3-5, 2014 in Manila, Philippines. With more than 400 participants and speakers, this was the first large scale, global impact evaluation conference in the region. Speakers for the plenary sessions and panel discussion included distinguished international figures from the field of impact evaluation and policy making. Conference sessions covered a range of topics and impact evaluations being conducted in the field of health, education, community development, governance, climate change, poverty alleviation and other aspects of social development. The conference was preceded by 2.5 days of pre-conference workshops on September 1-3, 2014.

Farah Said (Lahore School of Economics) presented the design of a study that is joint work with Mahreen Mahmud (University of Kent). The study is a Randomized Control Trial involving business loans provided to women in households where no female run enterprise exists currently. The study is being conducted in selected districts of Punjab, Pakistan in collaboration with Kashf, one of the largest private sector microfinance providers in the country and is expected to inform policy making by investing in a product that is targeted to draw new clients into their client pool.

Asha Gul (Lahore School of Economics) presented the design of the Randomized Control Trial being funded by the Pakistan Poverty Alleviation Fund (PPAF) and is an academic collaboration with Hamna Ahmed (University of Kent), Kate Vyborny (Duke University) and Simon Quinn (University of Oxford). This study focuses on incentivizing development across almost 800 Third Tier Community-based Organizations spread across Pakistan by testing the impact of two sustainable measures the donor can take to engage with these organizations: (i) self-reporting and (ii) non-financial incentives. The Baseline Survey for this study is presently being undertaken and expected to be completed by October 2014.

Lahore School Paper presented at Pakistan Institute of Development Economics Generates Attention

According to a recent case study by ZuniaSaifTirmazee and Mariyiam Haroon of the Lahore School of Economics presented at a Pakistan Institute of Development Economics (PIDE) seminar earlier this month, income distribution has been inequitable.

Pakistan has experienced tremendous economic growth over the last decade, but this did not reduce poverty and inequality. While discussing two indicators — efficiency and equity — the paper explained that efficiency required the overall improvement and equity required the improvement to be equitably distributed across various segments of the population.

Pakistan and the IMF, for the first time, seem to be almost on the same page about the current year’s economic growth forecast, despite the downside risks from militancy, monsoon floods and energy constraints.

While the government maintains its stance on achieving the 5.1pc growth rate target this year, the IMF expects it to rise to 5pc of GDP in the medium-term from last year’s 4.14pc due to easing of fiscal adjustment and improvements in the energy sector, public enterprises and investment climate.

This means that the country is now entering its average growth band of 5-6pc after a gap of seven years. It is estimated that the economy has the potential to reach 8-10pc growth in 5-6 years, provided the energy and security situation is improved and structural corrections are made sooner than later.

In the past too, Pakistan had seen swings in growth. But did this growth translate into an improvement in the lives of the majority of the population?

Most economists are not much impressed by the inclusiveness of past growth cycles, and strongly suggest that the government put in place policies at the beginning of another growth crest to benefit a majority of the people, rather than only a few.

According to a recent case study by Zunia Saif Tirmazee and Mariyiam Haroon of the Lahore School of Economics presented at a Pakistan Institute of Development Economics (PIDE) seminar earlier this month, income distribution has been inequitable.

Pakistan has experienced tremendous economic growth over the last decade, but this did not reduce poverty and inequality. While discussing two indicators — efficiency and equity — the paper explained that efficiency required the overall improvement and equity required the improvement to be equitably distributed across various segments of the population.

The paper revealed that there has been an overall improvement as indicated by an upward shift of the concentration curve, but concentration curves got steeper over time, indicating efficiency without equity.

Between 2008-09 and 2010-11, the average per capita income was higher than the social mobility index, implying that income distribution was inequitable. And the income equity index is less than one across all regions for both years, which depicts a high level of inequality. However, the magnitude of inequality varied across regions.

The paper also noted that growth in per capita income was achieved at the expense of equity. This meant that increasing incomes were being channeled towards higher expenditures and were not facilitating savings. The paper concluded that growth was not inclusive since it was achieved at the expense of equity — as the benefits of growth were unevenly distributed, with the poor benefiting less than the rich.

Perhaps mainly because of this reason, the country is far from achieving 16 targets of the Millennium Development Goals set for 2015. These particularly relate to universal primary education, reduction in extreme poverty and hunger (notwithstanding major contribution by an effective BISP), gender equality and women empowerment and lowering of child mortality rates.

Over 12m children are still out of school. Half of young children are under nourished and more than 39m people are still defined as poor. And the population growth rate of 2pc suggests that Pakistan would become the 5th most populous nation by 2050, further constraining limited resources. The youth bulge is already emerging more as a challenge than a dividend.

The Human Development Index has put Pakistan at 146 out of 187 countries. India and Bangladesh improved to 135 and 142 respectively.

Launched in July, the planning commission’s Vision 2025 recognised these challenges and hinted at pursuing steps to achieve the goal of private sector-led growth for a competitive economy and sustainable growth.

South Asian Economics Students’ Meet

The 11th South Asian Economics Students’ Meet (SAESM) was held in Thimpu, Bhutan from December 23-26, 2014. Seven countries participated in the event with each having a 10 member delegation. Team Pakistan comprised of undergraduate students the Lahore School of Economics and other universities.

The students competed in three different events: Research Paper Submission and Presentation, Budding Economist Competition and Team Quiz Competition. AzeemArslan Hassan, BSc IV (B) and President of the Lahore School Economics Society, presented a paper on the sub-theme “Trade Facilitation and Competitiveness in South Asia”, and won the “Best Paper Award.”

Mehak Anjum Siddiquei, BSc IV (C), also presented a paper on the sub-theme “FDI and Technological Transfers within South Asia”, whereas Rohail Ashraf Sadiq, BSc IV (A), represented Pakistan in the Budding Economist and team quiz competition. The Lahore School students gave impressive performances in their respective categories and received a lot of praise for their efforts. Rohail Ashraf Sadiq made it to the Semi-final round of the Budding Economist competition and was a part of the four member Pakistan team that were runners’ up in the quiz competition. The students attended three days of academic activities and also enjoyed two days of retreat in Paro, Bhutan from 27th to 29th December.

• Ginger Turner, Farah Said and Uzma Afzal, “Microinsurance Demand after a Rare Event: Evidence from a field experiment in Pakistan”. The Geneva Papers on Risk and Insurance – Issues and Practice 39, 201 – 223 (2014).

Visiting Scholar Programme with the School of Interdisciplinary area studies at Oxford University

In January 2015, the Lahore School of Economics launched a Visiting Scholar Program with the School of Interdisciplinary Area Studies (SIAS) at Oxford University - the Oxford-Lahore School ILM Program. The first batch of four Lahore School students from the PhD Economics program are currently registered for the Lent term and are attending lectures and seminars as well as interacting with faculty from both SIAS and the Department of Economics at Oxford to discuss their dissertation research.

The students are being hosted by Professor Matthew McCartney (Director, South Asian Studies) at Oxford University. Professor McCartney inaugurated the ILM Program along with Dr. Azam Chaudhry (Dean, Department of Economics, Lahore School of Economics) and welcomed the four scholars: Rabia Arif, Maryiam Haroon, ZuniaTirmazee and Nida Jamil. The scholars also met with Hermoine Lee (President of Wolfson College, Oxford University) to discuss areas of further collaboration between Oxford University and the Lahore School of Economics.

A reciprocal group of visiting scholars from Oxford plans to visit the Lahore School later in the spring of 2015.

Lahore School of Economics and Lahore Chamber of Commerce and Industry Collaboration

Strengthening industry-academia linkage, Lahore School of Economics (Lahore School) and Lahore Chamber of Commerce and Industry (LCCI) inked a Memorandum of Understanding that would pave way for joint research and seminars on economic issues.

The accord aims at capacity building programmes through training and empowerment by a mutual collaboration between business community and educational institutions.

LCCI and the Lahore School would collaborate for development of joint research activities and enhancement of capacity building. LCCI and Lahore School have decided to form a coordination committee.

Both would collaborate and undertake projects to help industry compete with challenges being faced in 21st century. Both organisations would hold workshops, conferences, symposia and seminars for mutual benefits.

LCCI President Ijaz Mumtaz said accord remained a significant step in bringing institutions/academia and trade, industry together. He said the economic challenges being faced by country need tailor-made and workable solutions and this was only possible through strong academia and industry linkage.He also said there was no dearth of resources in Pakistan but it was far behind in economic race because we have failed to properly tap these resources.He also said in developed economies there was a strong linkage between the academia and industry and Pakistan today also needed to adopt that pattern to overcome its multiple issues.

Dr Shahid Amjad Chaudhry, the Rector Lahore School of Economics said that the Lahore School would provide support to Lahore Chamber on economic issues. He said the School would conduct subject-specific workshops and seminars to equip the businessmen with latest working techniques. The Lahore School would provide support to Lahore Chamber for finalisation of country’s annual budget proposals.

Lahore School of Economics and Bahcesehir University Exchange Program

Lahore School of Economics, Lahore Pakistan and Bahcesehir University, Istanbul Turkey established long term cooperation in the areas of Faculty Exchange, Joint Research and Student Exchange.

The Lahore School has been sending students to Bahcesehir University under the Exchange Program every year since 2006.

Lahore School of Economics and Macquarie University Exchange Program

The Lahore School of Economics has recently established a long term cooperative relationship with Macquarie University, Australia.

As a result of this MOU, the Lahore School of Economics arranged a four weeks study tour to Macquarie University, Australia in the month of August.

Eight students enrolled in the third year of their bachelors program along with Ms Ayesha Khaled (Assistant Manager External Relations) visited Macquarie University from the August 1 to August 29, 2015.

Lahore School of Economics and University of Colombo Exchange Program

The Lahore School of Economics and University of Colombo, Srilanka have been in a cooperative academic relationship over last five years in the areas of Faculty Exchange, Research and Student Exchange.

The program has already resulted in a visit by Lahore School students to Sri Lanka with Professor Shamyla Chaudry and regular visits to Pakistan by faculty and students from the University of Colombo.

VIII. Undergraduate Programs in Economics

• BSc (Hons) with Double Major in Economics and Finance

• BSc (Hons) with Double Major in Economics and Management

• BSc (Hons) with Double Major in Economics and Political Science

• BSc (Hons) with Double Major in Economics and Accounting

• BSc (Hons) with Major in Economics and Minor in Social Sciences

• BSc (Hons) with Major in Economics and Minors in Maths& Stats

• BSc (Hons) with Major in Economics and Minor in Environmental Policy

Graduate Programs in Economics

• MPHIL in Economics

• PhD in Economics

IX. Economics Department Placements

• The largest number of Fulbright scholarships come from the economics department.

• A significant proportion of the students from the economics program go abroad for graduate studies in economics, finance and management.

• The top graduates from the economics program get the highest salaries.

• Students who do the double majors in Economics and Finance/Management and then do the Lahore School MBA are the top students in their class getting the highest salaries.